Drugmakers from AstraZeneca Plc to Sanofi may be better
equipped than Bristol-Myers to sell Amylin’s medicines and could
make higher offers, said Joshua Schimmer of Leerink Swann.
Bristol-Myers proposed an acquisition at $22 a share, which
Amylin’s board turned down last month, according to two people
with knowledge of the matter who declined to be identified
because the approach was private.

Amylin may be worth as much as $31 a share, said Robyn
Karnauskas, an analyst with Deutsche Bank. The San Diego-based
company received regulatory approval for Bydureon, a once-weekly
formulation of the earlier diabetes drug Byetta, in January and
the therapy may draw $1.5 billion in peak annual sales in the
U.S., Karnauskas said.

“The question is who can extract the most value, because
this is all a commercialization story from here,” Schimmer said
today in a telephone interview. “There are much bigger
commercial organizations and companies that probably more than
Bristol need to augment their franchises.”

Amylin jumped 54 percent to $23.77 at the close in New York
for the biggest single-day increase since August 1999. The
shares have more than doubled in the last 12 months. Bristol-Myers, based in New York, was unchanged at $33.67, and has
gained 25 percent in the last 12 months.

Jennifer Mauer, a spokeswoman for Bristol-Myers, and Alice
Izzo, a spokeswoman for Amylin, declined to comment.

AstraZeneca’s Strategy

AstraZeneca may see Amylin as an appealing target to help
expand its diabetes assets, Tim Anderson, an analyst with
Sanford C. Bernstein, said earlier this month. He cited the
London-based drugmaker’s “subscale presence in diabetes” and
its need for “late-stage/approved assets to help fill in the
gaps left open by a lagging pipeline and ongoing future patent
expiries.”

Bristol-Myers’s bid doesn’t negate the possibility of
AstraZeneca making an offer for Amylin, Anderson said in a note
to clients today.

“We’re active in looking at assets that are complementary
with our disease area focus and our strategy, but of course we
don’t comment on specific rumors or speculation,” Sarah
Lindgreen, a spokeswoman at AstraZeneca, said in an interview.

The drugmaker hasn’t approached Amylin since the rejection
of its bid made in a letter to the board, said the people
familiar with the matter. Amylin is focused on finding a
marketing partner for its products outside the U.S. and is
speaking with several drug companies, the people said.

International Partner

Amylin has sought a partner to help market Bydureon outside
the U.S. since November, when it ended a collaboration with Eli
Lilly & Co. Takeda Pharmaceutical Co., Paris-based Sanofi and
Merck & Co., the second-largest U.S. drugmaker, are among
companies doing diligence on a potential partnership, according
to the people.

Elissa Johnsen, a spokeswoman for Osaka, Japan-based
Takeda, Marisol Peron for Sanofi and Ian McConnell of Merck, in
Whitehouse Station, New Jersey, declined to comment.

Rejecting Bristol-Myers’s takeover offer may make it more
difficult for Amylin to forge a partnership instead of selling
the company, Schimmer said.

“It does kind of handcuff Amylin,” he said. “At this
valuation and with this information in the public domain,
management will have a hard time justifying an extreme level of
downside to shares, which would almost certainly come from an
ex-U.S. partnership.”

Investors have speculated Amylin’s shares may fall to $12
if the company made a partnership to market the drug now,
Schimmer said.

Industry Acquisitions

There have been 16 acquisitions greater than $1 billion of
biotechnology companies in Amylin’s peer group in the last five
years, according to data compiled by Bloomberg. The average
disclosed size was $8 billion, with an average premium of 35
percent, the data show.

At $3.5 billion, Amylin would be the largest of 19 deals
amassed by Bristol-Myers under its “string of pearls”
acquisition strategy since 2007. The drugmaker, losing patent
protection for three of four top medicines within three years,
agreed in January to buy Inhibitex Inc. for $2.5 billion to gain
experimental hepatitis C drugs.

Along with diabetes, Bristol-Myers is focusing on
Alzheimer’s, cancer, obesity, HIV and other diseases. The
company sells Onglyza for Type 2 diabetes, which drew $473
million in revenue last year, and Avapro, for high blood
pressure and kidney disease caused by diabetes, with $952
million in 2011 sales.

Amylin’s revenue has declined for the last three years as
Byetta faced competition from Novo Nordisk A/S’s Victoza,
driving shares down 69 percent from a high of $51.43 in August
2007. The company, with $650.7 million in revenue last year, had
$496 million in long-term debt, a $924.3 million promissory note
related to revenue sharing, and $204.1 million in cash,
equivalents and short-term investments as of Dec. 31, according
to a February statement.

Amylin also sells Symlin, for use with insulin in Type 1 or
Type 2 diabetes. Bristol-Myers, with a market value of about $57
billion, had $11.6 billion in cash, equivalents and marketable
securities and $5.38 billion in long-term debt as of Dec. 31,
the company said in a January statement.